The trend is not exclusive to the capital, as around 3% of homeowners across the UK have also rented out a room in their property to make a bit more money
UK homeowners are renting out a room in their house as a way of making some extra money amid the cost of living crisis that has pushed mortgage rates to record peaks.
Over one in every 10 (12%) London homeowners have started renting out a room in their house in the past year to generate additional income, reveals Barclays Consumer Spend report.
The trend is not exclusive to the capital, as around 3% of homeowners across the UK have also rented out a room in their property to make a bit more money.
UK homeowners have been especially hit by cost of living woes, with the average rate on a two-year fixed deal currently sitting at 5.74%, while for a five-year deal, rates are nearly 5.24%, per figures from Uswitch.
Borrowers would need to spread their home loans over more than 70 years to be able to afford the same mortgages on offer just two years back, banks have said.
Mortgage rates have increased substantially as the Bank of England raised interest rates to a 16-year high in a bid to tackle inflation.
The data from the Barclays report showed that one in six (16%) are not confident about their ability to meet their mortgage or rental payments, and 18% of those with mortgage or rent payments are adjusting their spending habits to cope with increasing housing costs.
Still, consumers’ confidence in their general household finances remained steady in March, at 67%.
Jack Meaning, chief UK economist at Barclays, said: With an expectation that the Bank of England will reduce interest rates from June, and banks responding by lowering mortgage rates, our research indicates that the housing costs that have been a drag on consumers for over a year are on the cusp of a turn, and will become a boost to spending from H2 and beyond. Today’s data shows this transition happening in real time.
Higher mortgage rates have also hit the property market, as house prices dropped for the first time in six months in March amid increasing mortgage rates, per Britain’s biggest mortgage lender.
A typical home now costs £288,430, nearly £2,900 less than last month, said Halifax.
Household spending such as DIY and electronics dropped 5.2% in March, with one in six (16%) holding off home renovations due to current economic pressures.